FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
EXHIBIT 10.2
FIRST
AMENDMENT TO
THIS FIRST AMENDMENT is
made on this 23rd day of December, 2009, by and between Charter Financial
Corporation (the “Company”) and Xxxxxx X. Xxxxxxx (the
“Executive”).
INTRODUCTION:
WHEREAS, the parties
entered into that certain employment agreement dated August 15, 2002 (the
“Agreement”).
WHEREAS,
the parties now desire to amend the Agreement primarily to bring the severance
provisions into compliance with Section 409A of the Internal Revenue
Code.
NOW, THEREFORE, in
consideration of the mutual agreements hereinafter set forth, the parties hereto
agree to amend the Agreement as follows:
1. By
deleting the fourth sentence of Section 8 in its entirety and substituting
therefor the following:
“The
value of the automobile provided shall not exceed forty thousand dollars
($40,000) and shall be replaced when permitted by the Company.”
2. By
deleting Section 9(a) in its entirety and substituting therefor the
following:
“(a) The
Company shall pay to the Executive’s estate his earned but unpaid compensation
(including, without limitation, salary and all other items which constitute
wages under applicable law) as of the date of his termination of
employment. This payment shall be made in accordance with the
Company’s normal payroll practices.”
3. By
deleting Section 10 in its entirety and substituting therefor the
following:
“Section
10. Termination
Due to Disability.
The Company may terminate
the Executive’s employment if the Executive is suffering from a
Disability. ‘Disability’ means any condition which constitutes a
‘disability’ within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the ‘Code’). A termination of employment due to
Disability under this section 10 shall be effected by a notice of termination
given to the Executive by the Company and shall take effect on the later of the
effective date of termination specified in such notice or the date on which the
notice of termination is deemed given to the Executive. In the event
the Executive becomes subject to a Disability:
(a) The
Company shall pay and deliver to the Executive (or in the event of his death
before payment, to his estate and surviving dependents and beneficiaries, as
applicable) the Standard Termination Entitlements in the event of his
termination of employment.
(b) Subject
to section 14, in addition to the Standard Termination Entitlements, the Company
shall continue to pay the Executive his base salary, at the annual rate in
effect for him immediately prior to the date the Disability commenced, during a
period ending on the earliest of: (i) the expiration of one hundred and eighty
(180) days after the date the Disability commenced; (ii) the date on which
long-term disability insurance benefits are first payable to him under any
long-term disability insurance plan covering employees of the Company (the ‘LTD
Eligibility Date’); (iii) the date of his death; and (iv) the expiration of the
Remaining Unexpired Employment Period (the ‘Initial Continuation
Period’). If the end of the Initial Continuation Period is neither
the LTD Eligibility Date nor the date of his death, the Company shall continue
to pay the Executive his base salary, at an annual rate equal to sixty percent
(60%) of the annual rate in effect for him immediately prior to the date the
Disability commenced, during an additional period ending on the earliest of the
LTD Eligibility Date, the date of his death and the expiration of the Remaining
Unexpired Employment Period. The payments under this subsection are
referred to in this Agreement as the ‘Disability
Benefits.’ Notwithstanding any other provision hereof, the Disability
Benefits shall commence within the time period required by section
14.”
4.
By deleting Section 12(b) in its entirety and substituting
therefor the following:
“(b) Subject
to section 14, in addition to the Standard Termination Entitlements, the Company
shall pay to the Executive a lump sum equal to three (3) times the Executive’s
average annual compensation received from the Company, the Bank, and any
subsidiary or affiliate thereof. For purposes of this section 12(b),
the Executive’s average annual compensation shall be the average of the
Executive’s compensation for the five calendar years preceding his termination
of employment as reported on IRS Form W-2. Such payment shall be made
(without discounting for early payment) within the time period specified in
section 14.”
5. By
deleting the last sentence of Section 13(c) in its entirety and substituting
therefor the following:
“In
addition, if the Executive’s resignation is deemed to be a resignation for Good
Reason, subject to section 14, the Company shall also pay and deliver the
Additional Termination Entitlements.”
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6.
By
deleting Section 14 in its entirety and substituting therefor the
following:
“Section
14. Terms
and Conditions of the Additional Termination Entitlements
and Disability Benefits
The Company and the
Executive hereby stipulate that the damages which may be incurred by the
Executive following any termination of employment are not capable of accurate
measurement as of the date first above written and that the Additional
Termination Entitlements or Disability Benefits (as applicable) constitute
reasonable damages under the circumstances and shall be payable without any
requirement of proof of actual damage and without regard to the Executive’s
efforts, if any, to mitigate damages. The Company and the Executive
further agree that the Company may condition the payment and delivery of the
Additional Termination Entitlements or Disability Benefits (as applicable) on
its receipt of the Executive’s resignation from any and all positions which he
holds as an officer, director or committee member with respect to the Company,
the Bank or any subsidiary or affiliate of either of them. Payment of
the Additional Termination Entitlements shall be made, or commence, as the case
may be, within thirty (60) days following the Executive’s termination of
employment; provided, however, if the Executive is a ‘specified employee’ within
the meaning of Code Section 409A, payment shall be delayed for six (6) months
after termination of employment to the extent required to avoid a tax under Code
Section 409A. The term ‘termination of employment’ and similar terms
when used in this Agreement shall mean a termination of employment that
constitutes a ‘separation from service’ within the meaning of Code Section
409A. Payment of Disability Benefits shall commence within thirty
(60) days following the commencement of the Disability and the first payment
shall include all payments accrued to the date of such
payment.”
7.
By deleting Section 15(a)(iv)(B)(2) in its entirety and
substituting therefor the following:
“(2) upon
election by the shareholders to serve as a member of such board, but only if
nominated for election by affirmative vote of three-quarters of the members of
the Board of Directors of the Company, or of a nominating committee thereof, in
office at the time of such first nomination;”
8.
By deleting the last paragraph of Section 15(a) in its entirety and
substituting therefor the following:
“In no
event, however, shall a Change of Control be deemed to have occurred as a result
of (i) any acquisition of securities or assets of the Company, the Bank, or a
subsidiary of either of them, by the Company, the Bank, or any subsidiary of
either of them, or by any employee benefit plan maintained by any of them or
(ii) the second-step conversion of First Charter, MHC to a stock form company
and the issuance of shares of common stock of such stock form company in
connection therewith. For purposes of this section 15(a), the term
‘person’ shall have the meaning assigned to it under sections 13(d)(3) or
14(d)(2) of the Exchange Act.”
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9. By
deleting Section 16 in its entirety and substituting therefor the
following:
“Section
16. Covenant
Not To Compete.
The Executive hereby
covenants and agrees that during the Employment Period, and in the event of his
termination of employment with the Company prior to the expiration of the
Employment Period, for a period of one year following the date of his
termination of employment with the Company, he shall not, without the written
consent of the Company, perform services of a similar nature as he performed for
the Company for any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, any other entity engaged in the
business of accepting deposits or making loans or any direct or indirect
subsidiary or affiliate of any such entity, within the State of Georgia; provided,
however, that this section 16 shall not apply if the Executive is
entitled to the Additional Termination Entitlements.”
10. By
deleting Section 17 in its entirety and substituting therefor the
following:
“Section
17. Confidentiality.
(a) Confidentiality. All
Confidential Information and Trade Secrets and all physical embodiments thereof
received or developed by the Executive while employed by the Company are
confidential to and are and will remain the sole and exclusive property of the
Company. Except to the extent necessary to perform the duties
assigned by the Company hereunder, the Executive will hold such Confidential
Information and Trade Secrets in trust and strictest confidence, and will not
use, reproduce, distribute, disclose or otherwise disseminate the Confidential
Information and Trade Secrets or any physical embodiments thereof and may in no
event take any action causing or fail to take the action necessary in order to
prevent, any Confidential Information and Trade Secrets disclosed to or
developed by the Executive to lose its character or cease to qualify as
Confidential Information or Trade Secrets.
(b) Return
of Company Property. Upon request by the Company, and in any
event upon termination of this Agreement for any reason, as a prior condition to
receiving any final compensation hereunder (including the Standard Termination
Entitlements and/or the Additional Termination Entitlements), the Executive will
promptly deliver to the Company all property belonging to the Company,
including, without limitation, all Confidential Information and Trade Secrets
(and all embodiments thereof) then in the Executive’s custody, control or
possession.
(c) Survival. The
covenants of confidentiality set forth herein will apply on and after the date
hereof to any Confidential Information and Trade Secrets disclosed by the
Company or developed by the Executive while employed or engaged by the Company
prior to or after the date hereof. The covenants restricting the use
of Confidential Information will continue to apply for a period of two years
following the Executive’s termination of employment with the
Company. The covenants restricting the use of Trade Secrets will
continue to apply following termination of this Agreement for so long as
permitted by the governing law.
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(d) Definitions. For
purposes of this section 17, the following terms shall have the following
meanings:
(i)
‘Affiliate’ means any person, firm, corporation, partnership, association or
entity that, directly or indirectly or through one or more intermediaries,
controls, is controlled by or is under common control with the Company or the
Bank, where ‘control’ shall mean control of more than fifty percent (50%) of the
ordinary voting power.
(ii) ‘Confidential
Information’ means data and information relating to the business of the Company,
the Bank, or any Affiliate (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Executive or of which the Executive became
aware as a consequence of or through his relationship to the Company, the Bank,
or any Affiliate and which has value to the Company, the Bank, or any Affiliate
and is not generally known to its competitors. Confidential
Information shall not include any data or information that has been voluntarily
disclosed to the public by the Company, the Bank, or any Affiliate (except where
such public disclosure has been made by the Executive without authorization) or
that has been independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means without breach of any obligations
of confidentiality owed to the Company, the Bank, or any Affiliate thereof by
the Executive.
(iii) ‘Trade
Secrets’ means data and information relating to the business of the Company, the
Bank, or any Affiliate thereof including, but not limited to, technical or
nontechnical data, formulae, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans, product plans
or lists of actual or potential customers or suppliers which (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy.”
11. By
deleting Section 18(c) in its entirety and substituting therefor the
following:
“(c) solicit,
provide any information, advice or recommendation or take any other action
intended, or that a reasonable person acting in like circumstances would expect,
to have the effect of causing any customer of the Company or the Bank with whom
the Executive had material contact with the last two (2) years to terminate an
existing business or commercial relationship with the Company or the
Bank.”
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12. By
adding the following sentence immediately after the second sentence of Section
29:
“The
indemnification payment shall be made within thirty (30) days of such
determination.”
Except as
specifically amended hereby, the Agreement shall remain in full force and effect
prior to this First Amendment.
In
Witness Whereof, the Company has caused this Agreement to be executed and
the Executive has hereunto set his hand, all as of the day and year first above
written.
| /s/ Xxxxxx X. Xxxxxxx | ||||||||
| Xxxxxx X. Xxxxxxx | ||||||||
| Charter Financial Corporation | ||||||||
| Attest: | ||||||||
|
By:
|
/s/ Xxxxxx X. Xxxxxx |
By:
|
/s/
Xxxxxxx X. Xxxxxxx
|
|||||
|
Name:
Xxxxxx X. Xxxxxx
|
Name: Xxxxxxx X. Xxxxxxx | |||||||
|
Title: Assistant
Secretary
|
Title: Senior
Vice President
|
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